Stock markets in Paris and Frankfurt rose on Thursday, with the euro in mixed trade ahead of expected interest rate cuts by the European Central Bank as the euro zone faces slowing economic activity and downward pressure on prices.
Outside the euro zone, London rose in mid-day trading after Asian stock markets were mainly weak as Beijing's latest plan to support China's troubled real estate sector fell short of expectations.
Investors expect the ECB to cut interest rates by 25 basis points on Thursday, following the previous two cuts this year.
The euro zone inflation rate for September was revised downward to 1.7% from 1.8%, official data released on Thursday. This interest rate is below the ECB's target of 2%.
The economic downturn is also putting pressure on the ECB to cut borrowing costs.
“Today's rate cut may not be an anomaly, as further significant rate cuts may be needed to restore positive momentum in the economy,” said Russ Mould, investment director at AJ Bell. Ta.
“Economic indicators in the region have been weak in recent days, meaning central banks need to lower borrowing costs to encourage more business and consumer spending.”
~China's real estate sector crisis~
Hong Kong and Shanghai stock markets fell as real estate stocks fell after traders were disappointed with new measures by China's housing minister to ease the real estate crisis.
Housing Minister Ni Hong announced on Thursday that authorities will nearly double the amount of loans available to complete unfinished housing projects to $562 billion, while also supporting the renovation of 1 million homes.
But Patrick Munnelly, market strategist at trader Tickmill Group, said there was “no new effort to get the market excited about a meaningful comeback in a sector.”
China, the world's second-largest economy, has struggled to recover since lifting strict coronavirus restrictions at the end of 2022, hit by a debt crisis in its real estate sector and weak consumer demand.
Tokyo markets also closed lower on Thursday, with global attention focused on the latest earnings season.
Taipei- and New York-listed TSMC, which controls more than half of the world's chip production, announced a stronger-than-expected increase in third-quarter net profit.
Analysts hope the announcement will offset concerns about the technology sector after leading Dutch company ASML this week cut its 2025 outlook and predicted weaker sales bookings.
“Semiconductor manufacturing giant TSMC's early results ease concerns about a potential slowdown in chip demand, as indicated by Tuesday's lackluster ASML data,” said Joshua Mahoney, chief market analyst at Scope Markets.
Finnish telecommunications equipment maker Nokia announced an 8% drop in sales and its stock price fell more than 4%.
Nestlé shares rose 2.7% after new CEO Laurent Fréchet announced a shake-up of the company's management team following sluggish sales.
– Main figures around 1045 GMT –
Paris – CAC 40: up 1.2% to 7,578.93
Frankfurt – DAX: 19,583.12, up 0.8%
London – FTSE 100: up 0.3 to 8,355.82 points
Tokyo – Nikkei 225: 0.7% lower at 38,911.19 (closing price)
Hong Kong Hang Seng Index: 1.0% lower at 20,079.10 (closing price)
Shanghai – Overall: down 1.1% to 3,169.38 (close price)
New York – Dow: up 0.8% to 43,077.70 (close)
EUR/USD: up from $1.0859 on Wednesday to $1.0863
GBP/USD: up from $1.2986 to $1.3008
Dollar/JPY: fell from 149.63 yen to 149.61 yen
EUR/GBP: down from 83.62p to 83.50p
West Texas Intermediate: flat, $70.37 per barrel
North Sea Brent crude: flat, $74.21 per barrel
dan-ajb/bcp/lth
